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dropping fee based credit card. Question...
05-29-2021, 04:52 PM
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#1
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Recycles dryer sheets
Join Date: Apr 2013
Posts: 496
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dropping fee based credit card. Question...
Last year I switched most of my purchases to the Fidelity Rewards credit card (I love that card) but I missed the deadline and automatically paid for my Citi Aadvantage card which carries a yearly fee of $99. We've had that card 25-30 years...And we have always found trying to renew it for airline tickets a royal pain with all of the blackout dates... (I hate that card.)
The Citi card comes up for renewal on June 1st and I am going to drop it. But I remember reading somewhere here that dropping a credit card can affect your credit rating and that it was suggested that we simply tell Citi that we want to move out of the fee based card to a no-fee card.
The ONLY reason I would do that is so it wouldn't affect our credit rating. I am more than happy with the Fidelity card, my Amazon Prime card, and our Costco Visa.
I'd appreciate input on whether it makes sense to switch cards, or simply to drop it. The last time I looked, our credit rating was 786.
Thanks!
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05-29-2021, 05:08 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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Drop or switch, your choice. I wouldn't drop a Benjamin a year for a card that you hate.
Don't worry about your credit score, it don't matter.
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05-29-2021, 05:16 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Oct 2015
Posts: 2,326
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Quote:
Originally Posted by RobbieB
Drop or switch, your choice. I wouldn't drop a Benjamin a year for a card that you hate.
Don't worry about your credit score, it don't matter.
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This! Why do you care about your credit score? It might drop a few points and then in six month, its' back up.
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05-29-2021, 05:19 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,929
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Personally I don't see "paying for it"... To many freebies out there just for the asking and they offer me everything I want....
__________________
20's "something" mind, trapped in a 70's "something" body
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05-29-2021, 05:25 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,361
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Yeah, just drop it if you don't want it... unless you plan to take a loan soon don't worry about any credit score impact.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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05-29-2021, 06:38 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,255
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Your credit score may drop a bit, but it will be temporary.
I have only one card with a fee, simply because it gives me one 'free' night at a hotel chain I use. The fee is like getting the room for 1/2 price. Sometimes 1/3 price.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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05-29-2021, 06:53 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Feb 2021
Posts: 2,351
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I agree with the others. Unless you anticipate "needing" your credit score soon, drop the card. And even if you do plan to take a loan in the near future, if your credit is good, having it drop a few points won't make a meaningful difference.
@Chuckanut - I'm another very happy Marriott Visa holder, as I assume that's the card you're describing. That "free" night every year is well worth the annual fee.
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05-29-2021, 08:05 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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Since you usually have to call to either cancel or downgrade, I typically prefer to downgrade to a no-fee card, which has always been available in my experience. That keeps the credit score and credit line unchanged - at least in the vast majority of the cases where the credit card company keeps the same line reporting to the CRAs and just attaches that line to a different product.
There could be reasons to cancel. If you wanted to churn a sign up bonus, or if you felt like you had too much credit with that issuer and wanted a different card, or if you wanted to simplify your credit profile. But those are limited exceptions IMHO.
...
The OP's score will probably drop for two reasons: a reduction in the average age of accounts since it sounds like this is one of their longer held cards, and a reduction in the total amount of available credit and thus an increase in credit utilization.
For someone with a long credit history and a number of cards, it'll probably drop their score very little. Someone with a less established history, or if the card in question is a large part of the average account age and/or the credit utilization calculation, would see it drop more.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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05-29-2021, 08:27 PM
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#9
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Recycles dryer sheets
Join Date: Apr 2013
Posts: 496
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Quote:
Originally Posted by SecondCor521
The OP's score will probably drop for two reasons: a reduction in the average age of accounts since it sounds like this is one of their longer held cards, and a reduction in the total amount of available credit and thus an increase in credit utilization.
For someone with a long credit history and a number of cards, it'll probably drop their score very little. Someone with a less established history, or if the card in question is a large part of the average account age and/or the credit utilization calculation, would see it drop more.
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SecondCor521, do you think there would be much impact on our credit score if we haven't been using that card much this year?
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05-29-2021, 08:33 PM
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#10
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Recycles dryer sheets
Join Date: Apr 2013
Posts: 496
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Thank you all for your replies, I appreciate it.
Darn, I just this moment realized something...Second "almost-but-not-100% launched" son has access to this card for emergencies and medical copays. I need to figure that into the equation. It may be that in the interim we need to downgrade to another no-fee card until we figure out how we want to handle that...
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05-29-2021, 09:46 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,882
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Quote:
Originally Posted by steady saver
SecondCor521, do you think there would be much impact on our credit score if we haven't been using that card much this year?
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I don't think that matters. Credit scores are based on a snapshot of your credit report at a point in time. The key pieces of information (there may be more I'm not thinking about) on that credit report are the credit limit, the credit age, the current balance, and the payment history (on time, late 30, late 60, late 90, that sort of thing). Historical usage isn't recorded on the credit report, so therefore it logically couldn't impact credit score. The only thing that is even remotely related to historical usage is the historical highest balance, but if you haven't used the card much lately, that data point isn't likely to have changed recently.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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05-29-2021, 10:49 PM
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#12
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Recycles dryer sheets
Join Date: Apr 2013
Posts: 496
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Thank you, SecondCor521!
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05-30-2021, 04:28 PM
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#13
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Recycles dryer sheets
Join Date: Apr 2013
Posts: 496
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As an update, I did end up moving out of the fee-based Citi card to a no fee AAdvantage credit card. We've apparently had that card for 30 years. All our credit history will remain unchanged and we won't lose our accumulated mileage earned.
I will continue to use my Fidelity, Amazon Prime and Costco cards the most...
Thanks to all for your input.
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05-30-2021, 05:19 PM
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#14
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Recycles dryer sheets
Join Date: May 2013
Posts: 78
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Probably heresy but I love my Chase Sapphire Reserve at 550 a year, minus 300 for credit on travel. The value of those points for flights, hotel and car rentals more than makes up for the cost. Right now rental cars are ridiculous and using my Chase points to split between cash and points brings them down to something reasonable. And booking flights where I can use my status and split it with points is brilliant. Amex is really only decent for transfers and I am going to move to low or no fee this year for that.
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05-31-2021, 09:01 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2010
Posts: 5,911
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I dropped two premium cards this year. Visa and Amex.
No change in my credit score. It always fluctuates between 832 and 850. Has done for years. I have no idea why it does, do not really care since it is meaningless to me.
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05-31-2021, 09:06 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Feb 2021
Posts: 2,351
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The only thing I've seen that had a significant and lasting impact on our credit scores was paying off our mortgage. Both of us consistently ran perfect 850s. When we paid off the house, we dropped 20-30 points and have stayed there for 2 years now.
I guess the fact that we now have no debt at all makes us less than perfect credit risks. Oh well. I'd rather have a couple million in the bank than a perfect FICO score.
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05-31-2021, 09:16 AM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,255
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Quote:
Originally Posted by Clover5
Probably heresy but I love my Chase Sapphire Reserve at 550 a year, minus 300 for credit on travel. The value of those points for flights, hotel and car rentals more than makes up for the cost. Right now rental cars are ridiculous and using my Chase points to split between cash and points brings them down to something reasonable. And booking flights where I can use my status and split it with points is brilliant. Amex is really only decent for transfers and I am going to move to low or no fee this year for that.
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I don't think you are at all heretical. I've looked at such expensive cards but so far they don't work for me. But, if they work for you, great.
I do wonder where your points come from. The issue I have for most of these cards is that for them to work for me, I would have to use them for every purchase imaginable. Even then it would take years to get enough points for one free coach flight, or one night's stay in a nice hotel. In the meantime I am giving up things like 5% cash back on some things at some times, and 2-4% cash back on everything else.
I guess if need to vigorously 'blow that dough' in order to make such a card work for me. Or maybe I am missing something?
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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05-31-2021, 11:46 AM
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#18
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Recycles dryer sheets
Join Date: May 2010
Posts: 497
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That fidelity card you have looks great 2% on everything !
I have citi 1 plus 1 on everything and it is great except can't use it for gas. If you buy gas just as you are pulling out into traffic your phone and car start up with fraud alert email text and phone. I have givin up telling them about it and use my other card for gas.
too lazy to change to the Fidelity card for now. In this day and age you have to keep two cards as fraud puts one out every once and a while for a week.
__________________
You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk?
Retired July '11 investments in very low cost index and mutual funds, balance once a year at best.
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dropping fee based credit card. Question...
06-01-2021, 08:48 AM
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#19
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,941
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dropping fee based credit card. Question...
Quote:
Originally Posted by Chuckanut
I don't think you are at all heretical. I've looked at such expensive cards but so far they don't work for me. But, if they work for you, great.
I do wonder where your points come from. The issue I have for most of these cards is that for them to work for me, I would have to use them for every purchase imaginable. Even then it would take years to get enough points for one free coach flight, or one night's stay in a nice hotel. In the meantime I am giving up things like 5% cash back on some things at some times, and 2-4% cash back on everything else.
I guess if need to vigorously 'blow that dough' in order to make such a card work for me. Or maybe I am missing something?
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Many of the points come from the sign up bonuses. I’m working my way through this interesting, free travel hacking course but have not decided whether it’s worth my time and effort to actually take out the cards and dive down this rabbit hole yet, so YMMV.
https://www.choosefi.com/travel/
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